Money makes the world go round...

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
1st April 2015 (Volume 12 Issue 13)
Money makes the world go round... We all want to make money – indeed that is the basis of the financial markets and the Islamic financial sector is no exception. While based on firm ethical principles, the principles of Shariah do not exclude making a profit – indeed, they encourage it. Nowhere is this seen more clearly than in the exceptional rise of the Islamic asset management industry, which has gone from strength to strength in recent years and whose growth during a challenging economic climate demonstrates the market's resilience and renewability even during tough times. Our cover story this week speaks to a number of key players in the market, looking at the latest developments and key growth trends in this most interesting of landscapes. Our IFN reports this week cover a new player in Saudi Arabia and an interesting deal originated in the UAE while our correspondents come to you from Kenya, Bahrain, Oman and take a look at Takaful and law in the Middle East. Our in-house analyses look at Libya and SRI, ethical and green investing while our features on the exciting market of the US are contributed by Devon Bank, Azzad Asset Management and TAIB. Special reports on Ijarah financing come to you from Ijara Management Co and IjaraUSA.com and we have an exclusive analysis on the international Sukuk market from the RHB Global Sukuk Markets Research team. In parallel with our asset management focus this week, I also would like to remind all our readers of the inaugural IFN Islamic Investor Forum 2015, occurring this Wednesday the 1st April at the Ritz Carlton in Dubai and followed by the IFN US Investor Forum on Thursday the 2nd April. Focusing purely on the rapidly growing and lucrative investment market, the forums promise to be rewarding events for all. Any subscribers who have not yet registered their complimentary attendance can do so at www.redmoneyevents.com, and we encourage all to attend. I wish all our readers a pleasant and productive week, and am pleased to present you with another action-packed issue of Islamic Finance news. Cover Story Islamic asset management: A golden opportunity? Islamic asset management is picking up pace, and the sector is gathering momentum. But where are the lines drawn and where do things really stand? LAUREN MCAUGHTRY talks to the players instrumental in developing the industry… “ IFN Reports • Improved liquidity management solution for UAE Islamic banks • Ashmore enters Islamic market • Digitization — the future of Islamic banking • Sovereign Sukuk: Southeast Asian sovereigns show consistency • UKEF moves into Sukuk space • Ajman Bank’s financing facility: A hybrid structure • IFN Weekly Poll: With the current market climate, will we see more players trying to achieve a negative yield on their Sukuk issuance this year? IFN Country Correspondents • AAOIFI reinstate dialogue with IASB: Towards a single set of global accounting standards • Oman’s Sukuk issuance makes slow progress • Kenya sets up committee to oversee implementation of capital markets plan IFN Sector Correspondents • Law: Investment treaty protection — mitigating the risk of government intervention • Takaful: A new Takaful family contract for the French market IFN Country Analysis • Libya: Stagnant market amid political struggle IFN Sector Analysis • SRI, ethical and green financial ventures in Islamic finance Shariah Pronouncement An Islamic bank has planned to launch a draw scheme for all of its current customers availing financing facilities from the bank Case Study IDB’s Sukuk: Lowest spread in the bank’s history The IDB on the 12th March 2015 successfully issued a US$1 billion, five-year Sukuk Wakalah under its US$10 billion medium-term notes program (series 21). Priced at the lowest spread above the five-year midswap rate in the bank’s history at 8bps, the paper was well received by the market. Special Reports Islamic Corporation for the Development of the Private Sector’s initiative in the Ijarah sector The Islamic Corporation for the Development of the Private Sector (ICD), a multilateral organization and the private sector arm of the IDB, undertook a major step to help SMEs and entrepreneurs operating in its member countries through the Ijarah initiative. SANJEEV K CHADHA writes. Here’s what you need to know about qualifying for Ijarah loans in North America Muslims on the North American continent want to be sure they have all the rights and privileges of living there. They want to be upstanding citizens in the US and Canada who abide by each and every law and bring their children up to understand and appreciate all the opportunities they’ve been given. RHB Global Sukuk Markets Research The Bloomberg Sukuk Market Return Index (BMSSUTR) rose by 0.35% month-on-month (M-o-M) (v -0.17% in the previous month) to 119.8 bringing year-to-date (YTD) returns to 1.31% (v 0.99% in the previous month). The Dow Jones Sukuk Total Return Index (DJSUKTXR) also rose 0.2% M-o-M (v +0.15% in the previous month) to 154.05, with YTD returns at 1.68% (v 1.48% in the previous month). Features Green Sukuk in the US Now that the idea of ‘green Sukuk’ is all the rage, DAVID LOUNDY recently found himself in a discussion about the prospects of environmentally-responsible Islamic bond issuances in the US and in this article, he gives an account of green Sukuk as a viable fundraising option. Islamic finance in the US – Origins and trajectory In a now famous cable to his superiors in Washington, former US ambassador to London Robert Tuttle warned in 2009 that the US stood to lose out if it did not more fully embrace Islamic finance. Creating curiosity in Islamic products in the US If ‘forms of governance’ were to be compared with ‘forms of financial systems’, it is very likely that ‘a democratic system’ may find some synergies with ‘an Islamic financial system’ be it collective risk sharing, focus on full disclosures and a few others. Having said that, creating curiosity in the latter shouldn’t be a herculean task with respect to the former, especially if it is the oldest democracy of the planet, that is, the US, and FURQAN AHMAD and TUSHAR GARG find out why. Opportunities abound in GCC region for Islamic asset management As the ramifications of the financial crisis led to a glut of global liquidity, yields from traditional investments have shrunk, driving fund and asset managers to pursue new opportunities in order to meet investors’ demands for returns. Likewise, within the GCC, a decade of strong oil revenues and robust economic growth has left large pools of capital to be deployed.  CONTACTS Editorial: Sasikala Thiagaraja Direct Line: +603 2163 7800 ext 34 Finance: Faizah Hassan Direct Line: +603 2162 7800 ext 26 Sales: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Steve Stubbs Direct Line: +603 2162 7800 ext 55 Subscriptions: Dubai: Mithun Gangolli Direct Line: +971 4 427 3638 Kuala Lumpur: Siti Amilia Amir Amzah Direct Line: +603 2162 7800 ext 27